Special Fayetteville City Council meeting recap: Aug. 24, 2021

Fayetteville Government Channel

On the agenda…

  • Approving the 2022 Employee Benefits Package.

Meeting Info

A special meeting of the Fayetteville City Council began at 5:30 p.m. Tuesday, Aug. 24, 2021. It is lived streamed on the city’s YouTube channel and held virtually (Zoom link).

» Download the agenda

Listed below are the items up for approval and links to PDF documents with detailed information on each item of business.


Roll Call

Present: Sonia Gutierrez, D’Andre Jones, Mark Kinion, Matthew Petty, Mayor Lioneld Jordan, Sloan Scroggin, Sarah Bunch, Teresa Turk, Holly Hertzberg
Absent: None

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New Business

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1. 2022 Employee Benefits Package (Details):

A resolution to approve the 2022 Employee Benefits Package.
Pass 8-0

Background: The employee benefits package for 2022 is outlined below:

Health Insurance: The one-year look back period of the city’s health claims shows a 91.2% utilization rate of claims paid versus premiums paid. Under the city’s current renewal rate guarantee with Arkansas Blue Cross Blue Shield, this utilization rate would result in a 6% premium increase for 2022 for the city’s medical plans. City staff and the broker have reviewed the structures of the plans and utilization of the city’s current offerings of both the HSA-compliant, HDHP and the PPO plan and recommend plan modifications to both plans to negate the 6% premium increase and lower premiums for both plans in 2022 as compared to current 2021 premiums.

The 2022 HDHP plan will have a lower deductible ($2,800 individual/$5,600 family), after deductible is met coinsurance will be 80%, maximum in-network out of pocket ($5,600 individual/$11,200 family). In adopting this plan structure, the overall premium will decrease by 7.4% from current year’s premiums.

The 2022 PPO plan will have a higher deductible ($1,500 individual/$3,000 family), however; this plan will provide co-pays for primary care, specialists and urgent care visits, co-insurance will be 80%, maximum out of pocket ($4,500 individual/$9,000 family).

In adopting this plan structure, the overall premium will decrease by 0.6% from current year’s premiums.

Staff and the broker recommend renewing with Arkansas Blue Cross Blue Shield for 2022 with the proposed plan structure changes and premium decreases of 7.4% to the HDHP option and 0.6% to the PPO option. By moving to the proposed plans, staff said annual cost savings will be over $800,000.00 to premiums.

COBRA: Staff recommends changing vendors for COBRA administration to Consolidated Admin Services (CAS). The move to CAS will cost an additional $2,556 annually over WageWorks based on current enrollment. CAS is an Arkansas-based provider that will provide better communication and support for internal and external customers than the current vendor.

City-paid life and LTD benefits: OneAmerica has provided a rate hold on Employer Paid Basic Life and Employer Paid LTD products for 2022. Staff recommends renewing with OneAmerica for the same benefit coverage and current rates.

Flexible spending accounts: Staff recommends American Fidelity continue as the administrator of Flexible Spending Accounts with no cost for services.

Health savings accounts: Staff recommends First Security Bank continue as the administrator of Health Savings Accounts with no cost for services.

Employee paid dental insurance: Delta Dental has provided a rate hold for 2022. Staff recommends renewing with Delta Dental.

Voluntary employee paid benefits: OneAmerica has provided a rate hold for 2022 on employee paid Short Term Disability and Employee Paid Life Insurance. Staff recommends renewing with OneAmerica for these products.

Supplemental benefits paid by employees: Staff recommends continuing to offer additional supplemental benefits to employees through American Fidelity which include: Disability Income Insurance, Accident Only Insurance, Cancer Insurance, Critical Illness Insurance, Life Insurance, AF Term Life Insurance, AAF Permanent Life Insurance and Hospital Gap Insurance.

Aug. 17 Discussion:
Those with comments opposed to the plan criticize the proposed increases to the high deductible health plan’s maximum out of pocket expense. Some of those opposed said they would prefer to pay a premium increase rather than risk the potential of a higher annual expense.

The council voted 6-1 to table the item until next Tuesday (Aug. 24). Petty voted against.

Aug. 24 Discussion:
Missy Cole, the city’s human resources director, shared data showing the actual annual city claims paid in 2020 in the current plan versus what the the proposed plan would’ve been:

She then showed the cost impact:

Finally, she showed what is the maximum exposure is to an employee or family:

During public comment, Cody Ashworth said he understands that there’s only a small amount of people who would be affected by the rate change, but he said those who are affected simply could not handle the increase.

Nick White, a patrolman with the Police Department and president of the city’s police union, said the organization does not support the proposed new plan, but would rather have a rate increase that keeps the maximum out of pocket expense closer to where it currently is.

Capt. Jimmy Vinyard, representing the city’s fire union, said his group also is opposed to the proposed rate change and would prefer to pay a premium increase rather than deal with the potential of a higher annual expense.

Council Member Teresa Turk said health insurance is part of a benefit and if the city wants to recruit and retrain police officers and fire fighters, it would be wise to support what the employees have stated they want. She said she knows it will come with a higher price tag, but it could be worth it to make sure city staff are satisfied.

Council Member Sloan Scroggin agreed, and said he’s heard from enough city staff to know that they are opposed to the proposed change. He said he can’t support the new plan, and would prefer the previous option with the 6% rate increase that it would come with.

Mayor Jordan said if the council wants to amend the package to include the current program’s high deductible health plan with the required 6% rate increase, he will make sure the budget for next year is put together in such a way that the added expense is covered.

Council Member Sarah Bunch said she’s in support of what the employees want, but she’s concerned that the city will continue to face issues like this in the future with rising insurance costs.

Decision:
The council amended the package 8-0 and voted unanimously to pass the resolution.


Adjourned

This meeting was adjourned at 6:10 p.m.

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